California has a balanced budget. Did Gov. Jerry Brown win or lose?
California Gov. Jerry Brown expended some political capital in his bid to close the state's budget deficit with a mix of cuts and higher tax revenue. He didn't get such a deal, but as of Tuesday night the state does have a budget.
California’s long journey to a balanced state budget is over.Skip to next paragraph
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And Gov. Jerry Brown (D), who won accolades for his plain talk about the painful measures in store for Californians as they embarked on that path and who spent heavily from his political capital along the way, will sign it, analysts say.
In the end, did he get what he wanted?
The rosiest of assessments is that he got as much as he could, but it does not appear to be much. The budget that the Legislature approved Tuesday does not include any of the tax extensions he wanted to help California meet its shortfall, relying instead on cuts in spending and the assumption that an improving economy will lead to $4 billion in new revenue.
And in a worst-case scenario, if the economic recovery is insufficient, the budget includes a mechanism for major service cuts to compensate for the nonexistent revenues. That could be costly indeed.
“It might not look so good … if revenues fall short of the highly optimistic assumptions, [and] the resulting cuts will be unpopular,” says Jack Pitney, professor of government at Claremont McKenna College. “It’s like treating chronic fatigue with candy bars and caffeine.”
Republicans focused immediately on that estimated revenue windfall, with Senate Budget Committee Vice Chairman Bob Huff calling it a “wand that Harry Potter would be proud to wield,” according to the Los Angeles Times.
Governor Brown has been at the center of the budget debate since taking office in January, after winning an election based largely on his promise of turning the state around economically.
Last week, he made national headlines after vetoing California’s first on-time budget in a quarter-century. State Controller John Chiang then made the first use of Proposition 25, a November citizens’ initiative mandating no legislative pay for a missed budget deadline.
But assessments of the final budget deal call into question whether it was all worth it for Brown.
“Brown comes out as a winner and a loser,” says Robert Stern, president of the Center for Governmental Studies. Brown is a bigger loser because he and the majority Democrat Legislature are “using gimmicks to call the budget balanced, and it is an all-cuts budget with no tax extensions,” he says.
However, “given the two-thirds vote requirement [for a tax increase] and the Republicans’ intransigence on tax extensions, it is perhaps the best he could have gotten,” adds Mr. Stern.
Much depends on what happens to the economy in coming months. After much speculation that the US economy would definitely improve in the second half of the year, the Federal Reserve last week pulled back on that assessment.